Matt,
I’m on Medicare and draw Social Security. I’m happy to hear I’m getting a 5.9% “raise” from Social Security. When will the Medicare Part B premium costs for 2022 be announced?
Chris S.
Chris,
Medicare usually releases Part A and Part B premium increases in the first week of November of the prior year. In 2020, they released the 2021 rates on November 6th. However, I suspect the question you’re really asking is – what’s my cashflow picture look like between the Social Security increase and my Medicare Part B premium?
Why is There an Increase in Medicare Part B Premium?
There’s an interplay between the Medicare Part B premium that likely comes out of your Social Security check every month and the amount of increase ahead for Medicare Part B. They’re not siblings, but they are cousins. Because they’re going to be percentage increases and not flat dollar amounts, the Medicare Part B premium increase hurts folks who pay more due to IRMAA than those who do not. If you haven’t filed your IRMAA appeal yet, be sure to do it soon. If you’re on Medicare and want a Medicare Supplement or a Medicare Advantage plan, you MUST have Medicare Part B.
Why Your Social Security Check Increase Relates to Your Medicare Benefits
The feds increased the average Social Security check payment by almost 6% for 2022. In 2021, they increased it to 1.9%. That’s a massive increase compared to historical annual increases. The WSJ article about the same increase states that it will translate an additional $92 to retirees’ average monthly benefit next year, bringing the amount to $1,657.
Historically, the percentage increase in Social Security payments was closely mirrored by the percentage increases in the standard annual Medicare Part B premium. So, while we’ll know in a few short weeks, most assume a $10 per month increase in the Medicare Part B premium for 2022 for people NOT impacted by IRMAA. That’s a 6.5% increase in Medicare Part B premium, a significant increase in historical terms.
When you combine the amount of money you’ll see in your checking account with the higher premium, the Social Security increase won’t be a perfect 5.9% more than you’d usually receive because the Medicare Part B premium hike will lower it. So, for folks making that “average” increase of $92 from the Social Security increase, it’s likely only really going to be a benefit of around $82 per month, which is an approximate 11% hit. If you’d like to read more, John Waggoner over at AARP did an excellent breakdown of the issue.
Thanks for the question, Chris!
I love answering Medicare questions. Send me yours at questions@prepareformedicare.comand I’ll pick a few for a future blog post!
To your wealth, wisdom and wellness!
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Author Bio Matt Feret is the author of the Prepare for Medicare book series and launched prepareformedicare.com to help people get objective answers to questions about Medicare. Matt is also the host of The Matt Feret Show. He has held leadership roles at numerous Fortune 500 Medicare health insurers in sales, marketing, operations, product development, and strategy for over two decades.
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